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JUNEAU -- The Alaska Supreme Court has upheld the constitutionality of a controversial federal law designed to protect firearms dealers from liability, but reinstated a case against the dealer who provided a gun used in a murder at the Juneau Fred Meyer.

The court, in a ruling issued Friday, determined that the federal Protection of Lawful Commerce in Firearms Act was constitutional, but found that the unusual method by which Juneau's Rayco Sales has provided the gun used in the Fred Meyer killing needed further court review.

The PLCAA was enacted by Congress in 2005 to prevent legal challenges to weapons dealers, but has come under criticism since the Sandy Hook Elementary and other mass shootings for blocking liability claims against the sellers of the guns used.

The PLCAA was supported by Alaska Sens. Ted Stevens and Lisa Murkowski, and Rep. Don Young, all Republicans.

The estate of the Juneau Fred Meyer shooting victim, 26-year-old Simone Kim of Anchorage, was represented by a local attorney and the Brady Center to Prevent Gun Violence from Washington, D.C. serving as co-counsel.

Rayco owner Ray Coxe said he had left the gun in question on the counter with customer Jason Coday, a homeless-looking man wearing a backpack and with a sleeping back wrapped in plastic tied around his waist.

Coday then disappeared with the .22-caliber rifle, leaving two $100 bills to cover the $195 purchase price on the counter.

Coxe denies that was an illegal sale.

"It wasn't a transaction, it was a theft," he said. Coxe said he reported it to the police, left the store to look for Coday, and deposited the $200 on the advice of the police.

Rayco couldn't document encounter, however, because the store's video recording system was not working. "My sales clerk failed to put a new tape in," Coxe said.

Coday was convicted of murder in 2007, and the Kim estate later filed the suit against Rayco and owner Coxe.

The owner's encounter with Coxe wasn't the first time a Rayco gun went missing. A 2008 audit of the shop showed about 200 missing guns from its inventory.

Coxe said those were mostly paperwork errors, due to inadequate documentation of guns provided to other dealers, but not stolen.

"Those guns that were reported as missing, a goodly portion of them were sent out to dealers in the country and the sales clerk failed to log them out," Coxe said.

He said the clerk has since quit his job, moved, and has not been able to be contacted at the forwarding address he left.

The Alaska Supreme Court agreed with Coxe that the PLCAA barred bringing negligence cases in such cases, upholding the decision of the Superior Court and agreeing that it was constitutional.

Where the Supreme Court rejected the lower court's conclusions was in its decision to grant Rayco summary dismissal. The Friday ruling concluded that evidence calling into question Coxe's version of the encounter with Coday should have been considered, and might have changed its conclusions.

The court said that might raise questions about whether the gun was stolen, or was knowingly transferred to Coday. That might open up Coxe to liability, it said.